Scientific research and experimental development tax credit frequently asked questions

The following will help answer your questions about the scientific research and experimental development (SR&ED) tax credit.

How much can be claimed?

The refundable credit cannot exceed 10% of the expenditure limit, which is generally $3 million. The expenditure limit is increased to $6 million for tax years that begin on or after December 16, 2024, once federal legislation is passed. This limit is determined according to Section 127(10.2) and proposed subsection 127(10.6) of the federal Income Tax Act and may be reduced as described in the Canada Revenue Agency's SR&ED Investment Tax Credit Policy.

The amount of annual non-refundable tax credit that may be deducted in a tax year is limited to the amount of the corporation's income tax payable for that year.

Does the change in the phase out of the federal expenditure limit change the expenditure limit for calculating the SR&ED tax credit?

Yes, the expenditure limit for calculating the refundable credit is the federal expenditure limit. Note: The Federal Budget 2025 proposes to change the federal expenditure limit.

Can a partnership claim the B.C. SR&ED tax credit?

The SR&ED non-refundable tax credit allows active members of partnerships to claim their proportionate share of the partnership's SR&ED BC qualified expenditure for the year.